The Industry Landscape

Of the $206 billion spent on advertising in the U.S., Fashion and Retail is the largest-spending industry at 22% or $43 billion per year. A large portion of this spend is allocated towards celebrity partnerships and campaigns.

An immense opportunity presents itself alongside this massive spend, as research from the Journal of Advertising indicates that sales can increase by 4% through a single celebrity endorsement. Evidently, the stakes of choosing the right celebrity endorsers are high, and poor selections can result in a large loss in sales for the brand, as well as carry the frequently overlooked consequence of high risk exposure.

Studies have shown that ads that use celebrities get an audience’s attention more easily than standard ads do. While this heightened level of consumer attention creates the opportunity for a brand to make their products memorable, it also creates the opportunity for tremendous backlash when celebrities engage in inappropriate behavior, such as making offensive statements, taking divisive political stances, being caught up in scandals, or many other types of risky conduct. Yet, despite the tremendously negative impact an endorsement that goes bad can have on a brand, more than half the industry’s endorsements carry a risk score of 50 or above. This lack of a celebrity risk strategy has been referred to by industry experts as playing a deadly game of Russian roulette.

The State of Celebrity Endorsements in Fashion & Retail – Report Highlights

Overall, luxury brands tend to make weaker celebrity decisions than more mass-appeal consumer brands. Spotted CEO Janet Comenos notes, “Luxury brands tend to be more dismissive of data than mass-market brands. The creative directors of these high-end labels tend to use celebrities as creative ‘muses,’ even if every indication shows that the celebrity is a poor choice.”

Staying true to this trend, Versace ranked as the lowest-scoring celebrity endorser in the industry. Their overall celebrity strategy was poor, across all dimensions measured, and, unsurprisingly, their celebrity decisions also scored very high in terms of risk.

Furthermore, many brands in the Fashion & Retail category make inconsistent celebrity choices. Reebok, Tommy Hilfiger, and Adidas have recently made celebrity decisions that appear on both top-ranking lists and bottom-ranking lists. This lack of cohesion across the brands’ campaigns and strategies overall is an indication of the randomness of these selections and the lack of a data driven approach in selecting celebrity endorsers.

Of all Fashion & Retail endorsement deals active in 2018, Under Armour had the highest-scoring endorsement deal partnering with Dwayne “The Rock” Johnson. This partnership was not only a spectacular alignment of brand-celebrity personality match, audience match, overall brand values and consumer approval, but it also scored low in terms of risk.
Looking at the best and worst deals, it’s evident that whether it’s for a larger sponsorship or a seasonal campaign, the process of selecting celebrities to represent brands is complex and multifaceted. In order to improve and fully unlock the potential of celebrity marketing strategies, brands must look closely and better consider each of those facets.